India shifts military presence in Maldives to civilian technical team amid evolving ties

India recently deployed a new technical team to the Maldives, replacing the existing personnel in response to the Maldives' request to withdraw Indian troops. President Mohamed Muizzu's party, which came to power in the Maldives, had prioritized the removal of Indian troops, a central theme of their election campaign. However, a subsequent agreement between India and the Maldives allows India to maintain operational aviation platforms in the Maldives, crucial for humanitarian aid and medical evacuation. Despite initial tensions, around 70 Indian personnel, along with Dornier aircraft and helicopters, remain stationed there.

Despite this development, India continues to be a significant development partner for the Maldives, evident in the recent increase in the annual aid budget. The Indian External Affairs Minister has expressed optimism for a diplomatic solution, emphasizing India's commitment to benefitting the Maldivian people. However, opposition parties like the Maldivian Democratic Party (MDP) and the Democrats have criticized President Muizzu's foreign policy decisions, particularly his alleged shift towards China. They argue that actions such as requesting the withdrawal of Indian troops and prioritizing a visit to China undermine the country's relationship with India. This discontent culminated in clashes between pro-government and opposition lawmakers in Parliament.

In the Interim Budget for Fiscal Year 2025 (FY25), the Indian government announced a grant of Rs 600 crore to support the Maldives, a 50% increase from the previous allocation. The strong relationship between India and the Maldives is rooted in shared history, culture, and trade, with both nations working closely in various sectors. Indian Prime Minister Narendra Modi underscores the Maldives' importance as a key partner in the Indian Ocean region. India's policy towards the Maldives focuses on economic, cultural, and strategic cooperation, aligning with its 'Neighbourhood First' policy aimed at fostering peace and development in the region.

The historical ties between the Maldives and India date back centuries, with scholars even suggesting shared ancestry between the Maldives and southern India. This connection is reflected in the Dhivehi language, believed to have roots in Sanskrit and Pali, originating in India. Over time, trade, education, and cultural exchanges, including entertainment through Hindi music, have strengthened the bond between the two nations. In recent years, healthcare has emerged as a significant area of cooperation, with India becoming a preferred destination for Maldivians seeking medical treatment. The Indira Gandhi Memorial Hospital, built with Indian aid, stands as a testament to this collaboration. Furthermore, tourism between the two countries has thrived, with India surpassing China and Europe as the top source of tourists for the Maldives in 2020, underscoring the vital role tourism plays in the Maldivian economy.

The Indian private sector has also made substantial contributions to the development of the Maldives, undertaking various projects across different sectors. Companies like Suzlon Energy, Bommidala Infrastructure, TATA Housing Development Company Ltd., Island Development Company Pvt. Ltd., and Tatva Global Renewable Energy have been instrumental in projects ranging from renewable energy to housing and waste management.

However, despite these positive developments, the Maldives faces significant economic challenges, primarily stemming from its heavy reliance on tourism. The country is grappling with a debt crisis, exacerbated by its growing ties with China. Extensive construction projects funded by Chinese loans during the previous administration have left the Maldives heavily indebted, with China holding over 42% of its $3 billion foreign debt as of 2021. Moreover, the current president's pro-China stance and plans for military growth have strained relations with India, raising concerns about regional stability.

China's lending practices in the Maldives have come under intense scrutiny, with concerns raised about the leverage Chinese banks hold over individual borrowers and the Maldivian government. There are fears that the Maldives may owe China significantly more than official reports suggest, highlighting the need for transparency in these loan deals. This scrutiny has become even more critical as the Maldives' economy has been weakened by the impact of the pandemic on tourism. Experts caution against over-reliance on loans and stress the importance of seeking alternative funding sources and more favorable loan terms to better manage the country's debt.

President Muizzu of the Maldives has expressed a desire for closer ties with China, potentially paving the way for adjustments to the 2017 Free Trade Agreement (FTA) between the two countries. While FTAs typically aim to remove trade barriers and set regulations between member nations, it's crucial to carefully evaluate the terms before signing. Of particular concern is the revised tariff structure, which classifies Chinese imports into three categories: immediate tariff removal, gradual elimination, and no change from 2014 levels. Importantly, any Chinese goods, even if indirectly imported, fall under the FTA, raising concerns about potential impacts on the Maldivian economy. Given that China is already a major source of imports for the Maldives and contributes significantly to government revenue through tariffs, eliminating these tariffs could have adverse effects on the national debt. This could force the government to choose between increased internal borrowing or domestic tax hikes, both of which could negatively impact household spending and potentially shrink the Maldivian economy.

Meanwhile, India has initiated the replacement of its military personnel in the Maldives with civilian technical staff. The first team has arrived to assume control of a helicopter in Addu, the southernmost atoll. This move is part of an agreement between India and the Maldives, under which India will withdraw all approximately 80 military personnel by May 10th. This transition marks a significant shift in India's military presence in the Maldives, signaling a commitment to diplomatic engagement and cooperation in the region.

On February 29th, Prime Minister Modi of India and Pravind Jagnauth of Mauritius jointly inaugurated an airstrip and a jetty constructed by India on Agaléga. Situated as a two-island Mauritian dependency, Agaléga lies 1,100 km north of Port Louis and 2,500 km southwest of Malé. The Memorandum of Understanding for the enhancement of sea and air transportation facilities on Agaléga island was signed in March 2015, following Prime Minister Modi's visit to Mauritius.

India recognizes the critical importance of collaborating with island nation governments in the region. Acknowledging the significant influence of domestic politics on a nation's foreign policy, India must carefully navigate its diplomatic ties while advancing its strategic goals. The Jugnauth government in Mauritius has exhibited greater adeptness in managing domestic opposition to India's presence compared to the previous Solih government in the Maldives.

In conclusion, India's recent deployment of technical personnel to the Maldives exemplifies a responsive approach to evolving dynamics. Despite initial concerns regarding Indian troop withdrawal, a bilateral agreement enables India to retain essential aviation platforms for humanitarian aid. India's commitment is palpable through its amplified aid budget and diplomatic focus, which underscores mutual growth. Historical, cultural, and economic ties reinforce a strategic partnership in line with India's 'Neighbourhood First' policy. Shared heritage, spanning language and trade, bolsters these bonds. The Indian private sector plays a significant role in the Maldives' development. However, the Maldives faces economic challenges, including a debt crisis linked to Chinese loans. Amid geopolitical shifts, India's nuanced withdrawal of military personnel showcases diplomatic finesse. Collaboration with Mauritius underscores India's regional vision for stability and progress. Navigating complex geopolitics, India's approach sets a precedent for fostering enduring partnerships.